Finding Text
Federal Program: Head Start Cluster (CFDA #93.600) Federal Agency: U.S. Department of Health and Human Services Federal Award Number(s): 08CH012021-02-01 Compliance Requirement: Reporting Questioned Costs: None noted Condition – During testing of reporting requirements for the Head Start program it was noted that the government submitted the required SF-425, however the Federal Cash and Federal Expenditure amounts reported did not agree to the general ledger. Criteria – Federal regulations require that financial reports submitted to federal agencies be accurate, complete, and supported by the accounting records. Cause – Internal controls or review procedures over reporting were not adequate to ensure that the financial information reported on SF-425 is reconciled to the general ledger. Effect – Submitting SF-425 reports that do not agree to the general ledger results in inaccurate reporting to the federal awarding agency. Noncompliance with Uniform Guidance reporting requirements increases the risk that errors in financial information may go undetected. Federal oversight is also impaired. Recommendation – We recommend that the government strengthen internal controls over federal financial reporting by requiring that all amounts reported on the SF-425 be reconciled to the general ledger prior to submission. Client Response – There was a spreadsheet completed for each month to track expenses by code, fiscal year and award. The administrative costs were monitored closely to make sure the 15% cap was not exceeded and the general ledger reconciled to reimbursement requests submitted. We released the grant in December of 2022 so this should no longer be an issue. We currently reconcile any grant reimbursement before they are submitted. Status of Finding – This is a repeat finding of 2022-005.